JLR loss after China fire

The company has had to set aside £245 million to cover the cost of the 5,800 vehicles destroyed in the explosion and subsequent fire.

More than 170 people were killed in the disaster, with nearly 800 injured.

The cost dragged JLR to a loss for its second quarter – the three months to the end of Sepember – after its profits had already been slashed by a dramatic slump in sales in China over the summer as the country's economy slowed down. JLR said it had also been hit by unfavourable exchange rtes and higher costs of manufacturing and launching new vehicles.

Without the Tianjin bill JLR's pre-tax profits would still have been down to just £88 million, compared to £609 million for the same three months a year ago.

Revealing JLR's latest financial figures today, its Indian parent company Tata Motors said the UK car company's revenues had held up, rising £23 million to £4.83 billion, despite falling sales in China. It was buoyed up by soaring sales in the UK, Europe and the US.

But for the first six months of JLR's financial year its revenue was still down, at £9.83 billion compared to £10.16 billion last year. Half year pre-tax profit was slashed by more than two thirds, down to £481m compared to £1.5bn a year ago.

Despite this, JLR has been cheered by its best-ever October sales figures – also revealed today – showing the company has returned to growth in China.

And the Jaguar XE has been key to the growth. It has just gone on sale in China and JLR sold 3,515 XEs, with their diesel engines made at the i54 plant beside the M54, and 15,716 have been sold since the car was launched this summer.

The success of the 'Baby Jag' has helped reverse the dramatic sales falls seen in China over the summer. Instead JLR sales rose nine per cent in China last month, as they grew 24 per cent worldwide to 41,553 vehicles.

Andy Goss, JLR's group sales operations director, said: "Our October performance has been driven by very positive market response to the Jaguar XE and Land Rover Discovery Sport, as well as a solid increase in sales of the Range Rover Sport, Land Rover Discovery and Range Rover.

"Regional retail sales growth was strong, with USA and UK having their best ever October and Europe significantly up on last year. It is also encouraging to see overall sales in China picking up again, reflecting increased demand for the Range Rover Sport and Range Rover, as well as start of sales of the Jaguar XE."

But a "challenging macro-economic environment" in countries like Russia and Brazil mean other overseas markets were down five per cent.

JLR will be hoping that the start of local production in China of the new Discovery Sport, which started in September, will boost sales further.

Some of the biggest growth came from European and UK demand for Jaguars, up 150 per cent and 64 per cent respectively.